It can certainly be frustrating when stock prices don't move as expected. But when the overall market is down, it's hard to avoid disappointing investments.of Hotung Investment Holdings Limited (SGX:BLS) is down 16% over three years, but including dividends it has a total shareholder return of 12%. And its total return actually outpaces the market's decline of 3.8%.
Next, let's look at the company's fundamentals to see if long-term shareholder returns are in line with the performance of the underlying business.
Check out our latest analysis for Hotung Investment Holdings.
To paraphrase Benjamin Graham, in the short term the market is a voting machine, but in the long term it is a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Hotung Investment Holdings has seen its EPS decline at a compound rate of 43% per year over the last three years. By comparison, the compound annual share price decline of 6% is less severe than the EPS decline. So despite the previous disappointment, shareholders should have some confidence that things will improve in the long term.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
Before buying or selling a stock, we always recommend taking a closer look at its historical growth trends, available here.
What will happen to the dividend?
It's important to consider not only the share price return but also the total shareholder return for a particular stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital increases and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that Hotung Investment Holdings' TSR over the last three years was 12%, which is better than the share price return mentioned above. Therefore, the dividend paid by the company is total Shareholder returns.
different perspective
Hotung Investment Holdings shareholders are down 5.4% for the year (even including dividends), while the market itself is up 0.7%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Long-term investors won't be too upset since they would have made an 8% return each year over five years. If fundamental data continues to point to long-term sustainable growth, the current selloff could be an opportunity worth considering. It's always interesting to track stock performance over the long term. But to understand Hotung Investment Holdings better, you need to consider many other factors. For example, we discovered that 2 warning signs for Hotung Investment Holdings (1 makes me a little uncomfortable!) You should be careful before investing here.
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Singapore exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodologies, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
